The Average is Rare

Today’s Chart of the Day from Jeroen Blokland, @jsblockland on Twitter, shows the distribution of one year of returns from the Dow Jones Industrial Average going back to 1900.

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Market Pullbacks

An article from Morningstar has several great charts. (To see them all, click on the link.)

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Real Estate vs. Stocks Over Long-Term

Recently, I was asked, "Should we invest in real estate or stocks?"

Today’s Chart of the Day is the long-term total return of the FTSE Nareit All REITs Index compiled by FTSE Russell company.

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Florida is #1

Today’s Chart of the Day comes from a Wall Street Journal article

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Risk of Stocks vs. Bonds

Today’s Chart of the Day comes from @brianferoldi on Twitter who does a great job of making complex things easy to understand.

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70% Up Over 10 Years

Today’s Chart of the Day comes from OfDollarsAndData.com and shows the percentage of years with positive returns per 10-year spans going back to 1900.

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Speculation is Not as Important as Quality

Today’s Chart of the Day comes from Robert Schiller’s book called Irrational Exuberance, which was summarized by Leandro, @Invesquotes on Twitter.

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A Simple Retirement Formula

A Simple Retirement Formula

Most of us get up and work hard every day so that someday we don’t have to. That day is called retirement. Getting to that point requires you to learn how to manage your money week to week and month to month. Retirement is a whole new game; it requires a lifelong perspective. Your early decisions will impact the next 20 or 30 years. Many people don’t give retirement planning the time it deserves until too late in the game.

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ETFs Are Growing

Today’s Chart of the Day comes from Morningstar Direct and shows the openings and closings of mutual funds vs. exchange traded funds (ETFs) since 2012.

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Be Wary of Non-Traded REITs

Today’s Chart of the Day comes from the Wall Street Journal and highlights why investing in Non-Traded, or illiquid, assets pose additional risk.

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Year End Comment

What a wild ride. In 2022 we experienced:

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Retiring Sooner Causing Inflation

Today’s Chart of the Day comes from the Financial Times and includes an article asking if higher wage demands will increase inflation like in the 1970s. However, this time it is different since the workforce is shrinking as shown by the Participation Rate, the falling orange line in the chart. The participation rate is defined as the percentage of healthy people 16 or older who are actively working or looking to do so.

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Dow vs. S&P

Today’s Chart comes from Benedek Voros from S&P Dow Jones Indices. I always like to point out firsts, and this year there have been many.

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20 Year Active to Passive

Today’s Chart of the Day comes from FinancialTimes.com and shows that starting in 2015, and each year after, investment funds left actively managed funds, in red, and were reinvested into passive funds, in blue, which have grown each year for the last 22 years. 

The interesting part is the year over year growth is accelerating in 2022 as the downturn in both stock and bond prices provided an opportunity to sell out of many funds and not pay capital gain taxes. Any further downturns in 2023 could accelerate this trend even more.  

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Average Can Be Hard to Achieve

Today’s Chart of the Day comes from Compounding Quality, @QCompounding on Twitter, and shows that over the last 20 years, the average investor realized only an annual return of 3.6%. This is less than 4.3% on bonds, and not much higher than inflation of 2.2%, meaning that many just barely broke even after inflation and taxes. This can be compared to a return of 9.5% on the large-cap stock index, or 7.4% for even a conservative generic portfolio of 60% stocks and 40% bonds.

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